Semiconductors, Supply Chains and Techno-Nationalism

BGA Senior Advisor Alex Capri released a report on actions the United States is taking to revitalize its semiconductor industry. The report, published with the Hinrich Foundation, looks at a series of measures Washington is considering in the context of the broader conversation on supply chains and techno-nationalism, leveraging Capri’s over three decades of experience on global value chains, trade, geopolitics and technology across more than 40 countries.

Context

The publication’s release came amid a series of recent developments in the evolution of U.S. policy, including the release of a new supply chain report by the U.S. government under President Joe Biden following the conclusion of a 100-day supply chain review.

The report takes stock of semiconductors, supply chains and techno-nationalism amid a confluence of trends, including a recent global chip shortage, rising U.S.-China competition and continuing Covid-19 pandemic. These events have created what Capri characterizes in the report as a “milestone in public perception”.

Significance

Capri argues that recent actions suggest some continuity in techno-nationalist policies between Biden and Trump despite changes in areas like allied engagement. In particular, the Biden team is still ramping up some decoupling, reshoring and ringfencing efforts.

The report notes that early actions on semiconductors by the Biden administration suggest a determination to boost the domestic industry in spite of the challenges that remain. This includes instituting reshoring, leveraging export controls and sanctions against Chinese companies and encouraging support and investment from certain companies and allies amid limits to domestic funding.  

Implications

Affected U.S. semiconductor companies will have to decide how to adjust to the evolving environment as it takes shape. This includes how to allocate resources for both “leading edge” and “trailing edge” chip manufacturing capacity.

The broader trend of techno-nationalism remains important to watch for companies. The trend, which Capri details in his new book on the subject, is significant for a range of areas such as trade as well as individual sectors such as the digital domain, healthcare, energy and defense.

BGA will continue to keep clients on updated on new developments as they occur. If you have any questions or comments, please reach out to BGA Senior Advisor Alex Capri at acapri@bowergroupasia.com.